Meerkat Finance, a Binance Smart Chain project has allegedly rug pulled 13.96 million BUSD and 73,635 BNB with a combined total of nearly $32 million, making it the biggest fraud on Binance Smart Chain. The project claimed their system was hacked earlier, but currently the main website cannot be accessed, making many believe that they have run away with all the funds.
The project was launched only last night on the BSC chain, and within 24 hours it managed to get away with over $30 million in user’s fund. Traders have requested Changpeng Zhao to intervene and look into the issue.
BSC project Meerkat Finance is suspected of being rug, taking away 13.96 million BUSD, and the other 73,635 BNB. MKAT claimed to be hacked and stole all resources. Currently the project website cannot be opened. This may be the largest fraud project on the binance smart chain. pic.twitter.com/KbdclfDBKA
— Wu Blockchain (@WuBlockchain) March 4, 2021
It is being alleged that the fund drain occurred due to a smart contract alteration where the alleged hacker made changes to the project’s vault business logic using a Meerkat deployer’s account. This suggests either the private key was compromised or in the case of an alleged rug pull, the operators themselves altered the core business logic of the platform to drain funds.
Binance Smart Chain has gained a lot of traction over the past month owing to network congestion and high gas fee on the Ethereum network. The gas fee for even simple swaps on Defi protocols required on average $10 making these projects barely usable. In light of scalability issues, many defi protocols and traders shifted to BSC for the time being.
The rising popularity of BSC also helped the native token soar from just below $50 in the first week of February to a new all-time high of $342.88. Many BSC-based Defi protocols such as PanCake swap also rose to new ATH and registered massive trading volumes. Amid growing hype of BSC as the next Ethereum killer, Meerkat rug pull could play a spoilsport.
The Biggest Binance Smart Chain Heist
The number of exit scams, rug pulls, and hacks registers a massive spike as the popularity of a project or use case grows in the cryptocurrency ecosystem. In 2017, ICO’s popularity led to a series of scams where fraudulent projects claiming to be the next big cryptocurrency raised millions and vanished overnight with investors’ money.
A similar pattern was observed in 2020 with the Defi ecosystem, where every other month a new Defi project used to enter the market without any special use case and within weeks they used to collect millions from traders owing to the hype, only to rug pull investors and get away with all the capital. The current alleged rug pull would make it the biggest heist in the wake of BSC’s rising popularity.
Binance has not made any official statement on the alleged exit scam at the time of writing.